Ripple files notice for cross-appeal in ongoing SEC clash over XRP
Ripple Labs filed a notice of cross-appeal to the United States Court of Appeals for the Second Circuit on Oct. 10 as part of its ongoing legal battle with the US Securities and Exchange Commission (SEC).
The cross-appeal follows the SEC’s own appeal earlier this month, which seeks to overturn the court ruling that programmatic sales of XRP to retail investors did not violate securities laws.
Both appeals will now be merged into a single case, further extending the legal proceedings that have captivated the crypto industry since the SEC first filed its complaint in 2020.
Ripple’s appeal contests the final judgment requiring the company to pay $125 million in civil penalties related to its institutional sales of XRP tokens. Although this penalty was substantially lower than the nearly $2 billion initially sought by the SEC, it was still significantly higher than Ripple’s own proposal of $10 million.
Ripple’s chief legal officer, Stuart Alderoty, posted on social media that the cross-appeal filing aims to ensure that “nothing is left on the table.”
Alderoty added that the SEC will likely pursue the argument that XRP sales on exchanges and token distributions to employees and developers are securities. Moreover, he showed optimism about the outcome of the appeal, stating:
“We look forward to the federal court of appeals finally putting a stake in the heart of [SEC Chair Gary Gensler’s] misguided attack on our industry.”
Meanwhile, Ripple CEO Brad Garlinghouse said the SEC is only interested in “creating havoc” and avoiding providing clarity to crypto industry players in the US.
He added:
“With our cross-appeal today, we’re looking forward to sealing the SEC’s fate and finally putting an end to the SEC’s regulation-by-enforcement agenda.”
Four-year legal battle
The SEC initially sued Ripple in December 2020, accusing the company of unlawfully offering unregistered securities through its XRP token, totaling $1.3 billion.
After years of litigation, the US District Court for the Southern District of New York Judge Analisa Torres ruled partly in favor of Ripple in July 2023. She concluded that while institutional sales of XRP violated securities laws, programmatic sales and other distributions of XRP to retail investors did not constitute securities offerings.
As a result, the SEC presented a motion for remedies asking for a $2 billion fine over Ripple’s actions, which Judge Torres partially rejected on Aug. 7. Instead, the court levied a $125 million fine on Ripple and ruled that XRP sales to retail investors did not violate securities laws.
The SEC filed an appeal to overturn the ruling less than two months later, which has now prompted Ripple to file its own cross-appeal.
